BETTY A OLSON, Complainant
PHILLIPS PLATING, Respondent A
WILLIAM BARATKA, Respondent B
The above-captioned matter was referred back to the Equal Rights Division by the Commission on April 8, 1986, for the purpose of conducting a hearing to enter a decision regarding remedy, as the parties could not agree on the appropriate remedy due Complainant under the Commission's October 9, 1981 decision. The commission's finding that Respondent had violated the Wisconsin Fair Employment Act by demoting Complainant because of her sex and then terminating her employment in retaliation for her having filed a complaint of sex discrimination had previously become final as a result of confirmance by the court of appeals, and the Wisconsin Supreme Court's denial of the Respondent's further petition for review.
The Division conducted the hearing to determine the remedy due Complainant on October 9, 1986, but when the Administrative Law Judge (ALJ) received the transcript of the hearing he found it to be "seriously flawed" and thus requiring that a further hearing be held in the matter. That further hearing was then held on September 17, 1987. Complainant's counsel submitted an initial brief to the ALJ in October 1988, and arguments to the ALJ apparently ended with Respondent's letter brief dated February 13, 1989. The ALJ issued his decision on February 2, 1990, but subsequently issued an amended decision on February 19, 1990.
The Respondent filed a petition for Commission review of the ALJ's decision on February 22, 1990, and later supplemented its petition as a result of the ALJ's amended decision. Thereafter, the Commission issued a briefing schedule but then cancelled it in April 1990, after receiving notice from Complainant's counsel regarding an offer by Respondent's counsel to negotiate a settlement. In May 1991, Complainant's counsel advised the Commission that the case had not been settled so the briefing schedule was reinstated. The final brief was submitted to the Commission on July 11, 1991.
Thereafter, on November 24, 1991, the Commission issued a proposed decision in the case, simultaneously advising the parties that a final decision would be issued after deciding the matter of reasonable attorney's fees to be awarded Complainant. During the midst of the briefing period regarding attorney's fees there was a substitution of counsel for Respondent. The final brief on this subject was thus received on January 17, 1992.
Based upon a review of the record in its entirety, the Labor and Industry Review Commission hereby issues the following:
Demotion/Termination Rehire/Back Wages
1. The Complainant was demoted effective September 18, 1978, from her position of Head Inspector, where she received a pay rate of $3.65 per hour, to the position of Inspector, where she was paid $3.15 per hour. As a result of the demotion, from September 18, 1978, until November 3, 1978, when Complainant left on maternity leave, she incurred a wage loss of $129.25. This amount was arrived at by multiplying $.50 per hour times 258.5 hours, the amount of hours Complainant worked between September 18, 19878 and November 3, 1978.
2. Complainant was due to return from her maternity leave on May 3, 1979, but Respondent terminated her employment. Respondent rehired Complainant effective January 17, 1983. The Complainant's back pay entitlement for the period May 3, 1979, through January 16, 1983, reflects the total wages actually earned by the four people who held the Head Inspector position on the second shift during the time period involved, including amounts earned during periods when they were reassigned to the first shift following shutdowns on the second shift. A summary of those earnings are as follows:
|05/03/79 - 06/09/79||Constance Reiter||$ 631.80|
|06/11/79 - 04/12/80||Mary Collins||4,982.84|
|04/13/80 - 10/25/80||Gail Stade||4,173.53|
|10/26/80 - 01/16/83||Rochelle Thomas||22,403.14|
3. As of January 16, 1983, the Head Inspector on the second shift, Rochelle Thomas, was earning $6.55 per hour as her base rate (excluding bonuses). Complainant was rehired on January 16, 1983, as an Inspector and was paid a wage rate of $5.10 per hour.
4. The hourly wage rates for the Head Inspector since 1978 when Complainant was demoted and up to the October 1986 hearing were as follows:
|01/79 - 06/79||$3.90 an hour||07/82 - 12/82||$6.10 an hour|
|07/79 - 12/80||$4.28 an hour||01/83 - 12/83||$6.55 an hour|
|01/81 - 06/81||$4.70 an hour||01/84 - 12/84||$6.80 an hour|
|07/81 - 12/81||$5.10 an hour||01/85 - 12/86||$7.14 an hour|
|01/82 - 06/82||$5.35 an hour|
5. From January 1983, through September 1987, the Complainant worked the following amount of hours plus overtime broken down as follows:
As Head Inspector
|01/16/83 - 12/31/83||1,928.50/49||$10,842.35/13,113.14||$ 2,270.79|
|01/01/84 - 12/29/84||1,997.75/103||12,133.93/14,635.30||2,501.37|
|01/01/85 - 12/28/85||1,989.50/3.0||12,036.00/14,237.16||2,201.16|
|12/28/85 - 09/20/86||1,499.25/18.25||9,159.75/10,900.11||1,740.36|
|09/20/86 - 09/05/87||1,960.00/4.75||11,765.18/14,045.27||2,280.09|
6. In addition, from September 30, 1985 through August 11, 1986, the Head Inspector on the second shift received one hour of overtime work each day (approximately 210 days) for an additional $2,249.10.
7. The above amounts must be updated to the point at which the Complainant is reinstated to the position of Head Inspector, and are subject to interest as set forth below.
8. The record reflects that there are two types of bonuses that the Respondent's employes receive. They are: (1) anniversary bonus; and (2) Christmas/Year end bonus.
9. The anniversary bonus is paid each year on the anniversary date of the employe. It is computed as follows: 2¢ per year of employment, times the number of hours worked during the prior year. This bonus was in effect prior to the Complainant's discharge.
10. The Complainant's initial date of hire was May 31, 1974. Therefore, her anniversary date is May 31 of each year. From January 1983 to August 1987 (about 56 months) the Complainant worked approximately 171 hours per month or approximately 2,052 hours per year.
11. Based upon the calculated average hours worked, the following bonus payments were lost:
|A. May 31 1979||- Fifth Anniversary equals 5 [years] x 2¢ = 10¢ per hour bonus.
- 6 [months worked] x 171 [hours] = 1,026 hours
(six months have been deducted for maternity leave) x 10¢ = $102.60.
|B. May 31 1980|| - Sixth Anniversary equals 6 [years] x 2¢
= 12¢ per hour bonus.
- 12 [months work] x 171 [hours] = 2,052 hours x 12¢ = $246.24.
|C. May 31 1981|| - Seventh Anniversary equals 7 [years] x 2¢ = 14¢ per hour bonus.
- 12 [months work] x 171 [hours] = 2,052 hours x 14¢ = $287.28.
|D. May 31 1982|| - Eighth Anniversary equals 8 [years] x 2¢ = 16¢ per hour bonus.
- 12 [months work] x 171 [hours] = 2,052 hours x 16¢ = $328.32.
|E. May 31 1983|| - Ninth Anniversary equals 9 [years] x 2¢ = 18¢ per hour bonus.
- 12 [months worked] x 171 [hours] = 2,052 hours x 18¢ = $369.36.
|F. May 31 1984|| - Tenth Anniversary equals 10 [years] x 2¢ = 20¢ per hour bonus.
- 12 [months work] x 171 [hours] = 2,052 hours x 20¢ = $410.40.
|G. May 31 1985|| - Eleventh Anniversary equals 11 [years] x 2¢ = 22¢ per hour bonus.
- 12 [months work] x 171 [hours] = 2,052 hours x 22¢ = $451.44.
|H. May 31 1986|| - Twelfth Anniversary equals 12 [years] x 2¢ = 24¢ per hour bonus.
- 12 [months work] x 171 [hours] = 2,052 hours x 24¢ = $492.48.
|I. After May 31 1986||- Must be adjusted to reflect hours worked and correct seniority (years of service).|
12. The anniversary bonuses for 1979 through 1986 equal $2,688.12.
13. The anniversary bonuses actually paid to the Complainant use January 16, 1983, as her date of hire and thereby lower the hourly bonus rate. She was paid bonuses as follows: January of 1984, $41.01; January of 1985, $80.19; and February of 1986, $114.57, for a total of $235.77.
The anniversary bonuses owed as of May 31, 1986, after crediting bonuses paid equals $2,452.35.
14. Christmas/Year end bonuses were paid as follows:
|A. 1982 -||Bonus of $100 per employe.
|B. 1983 -||5% bonus on earnings for the last six months based upon Head Inspector rates. Equals approximately $327.83 minus the actual bonus paid to the Complainant of $271.60 for a net sum of $56.23 owed to Complainant.
|C. 1984 -||5% bonus on earnings based upon Head Inspector rates. Equals approximately $731.77 minus the actual bonus paid to the Complainant of $0.00 for a net sum of $731.77 owed to Complainant.
|D. 1985 -||2.5% bonus on 1985 earnings based on Head Inspector rates. Equals $355.93 minus the actual bonus paid to the Complainant of $0.00 for a net sum of $355.93 owed to Complainant.
Summary of Bonuses Owed to Complainant
15. Anniversary - $2,452.35; Christmas/Year end - $1,243.93. The total of these amounts is $3,696.28. This amount is subject to any post-hearing adjustments and interest as set forth below.
Vacation and Personal Day Benefits
16. The Complainant was treated as a new hire for purposes of calculating vacation benefits when she was rehired in January 1983. The Complainant's entitlement to vacation pay and personal day benefits based upon the applicable current Head Inspector wage rates, less amounts Complainant received for those benefits, are as follows:
(Plus One Personal Day)
| Vacation and
|1979 - 2 weeks ($342.40)||0||$ 342.40|
|1980 - 2 weeks ($342.40)||0||342.40|
|1981 - 2 weeks ($408.00)||0||408.00|
|1982 - 2 weeks ($530.80)||0||530.80|
|1983 - 2 weeks ($576.40)||0||576.40|
|1984 - 2 weeks ($598.40)||(1 week $218.80)||379.60|
|1985 - 3 weeks ($913.92)||(3 weeks $768.00)||145.92|
|1986 - 3 weeks ($913.92)||(3 weeks $768.00)|| 145.92
|Total 18 weeks ($4,624.64)||$1,754.80||
The vacation and personal day benefits owed equals $2,871.44 plus interest as set forth below.
17. The Complainant was deprived of medical insurance benefits during the period of her unlawful discharge. She incurred $1,860.30 in medical bills during this period.
18. The Complainant received a $624.50 credit due to assistance from Hill-Burton, a funding source which assists those unable to pay their medical bills. Under the Respondent's insurance program the Complainant would have had to pay $200 in deductible costs ($100 per year) plus 20% of the balance, leaving a net balance of $828.64 that she incurred as a result of her lack of insurance. An offset total of $130.40 is attributable to 1979, and $698.24 is attributable to 1981. The Complainant was obligated to pay $828.64 and should receive this amount plus interest as set forth below.
19. The Respondent maintained a profit sharing plan in which Complainant was a participant. Contributions to the plan are based on earnings. Once final wage figures are determined for each year involved in this matter, adjustments may be necessary in profit sharing contributions. These adjustments plus any payment of interest necessary to reconstitute the appropriate amount in the Complainant's account should be paid as part of the remedy herein.
20. The computations which appear below and have been submitted by Complainant (with some modification by the Commission) are compiled based on Findings of Fact 1-18, and are set forth to show the principal amount owed Complainant, plus interest after appropriate deductions, for each year beginning with 1979.
Demotion back pay
Lost Wages $3,697.20
|1979 Interest $150.08 (1)|
|Interest for 1980 = $671.99|
|Interest for 1981 = $1,561.80|
Vacation Plus Personal Day
|Interest for 1982 = $2,681.40|
Vacation Plus Personal Day
|Interest for 1983 = $3,074.13|
Vacation Plus Personal Day
|Interest for 1984 = $3,563.98|
Vacation Plus Personal Day
|Interest for 1985 = $4,010.00|
Vacation Plus Personal Day
|Interest for 1986
01/01/86 - 3/14/86 = $ 835.43
03/14/86 - 12/31/86 = 1.480.87
Principal Balance Owed After Crediting
Additional amounts that need to be calculated pursuant to Commission Order:
Based upon the above FINDINGS OF FACT, the Commission issues the following:
1. That Respondent cease and desist from discriminating against the Complainant on the basis of her sex and from retaliating against her because she filed a complaint of discrimination.
2. That Respondent A reinstate Complainant to the position of Head Inspector.
3. That Respondent A give back pay to Complainant for the period from the date of her demotion and from the date of her termination of employment (the expiration of her leave of absence), less any amounts earned by way of mitigation of benefits from other employment, welfare or unemployment compensation benefits. Further, Respondent is ordered to increase the back pay awarded to Complainant by simple interest calculated at the rate of 12%.
4. That Respondent pay the sum of twenty nine thousand four hundred eighty four dollars and forty-five cents ($29,484.45) as reasonable attorney's fees and costs in this matter. This sum shall be paid by check made payable jointly to Betty A. Olson and Attorney William Haus.
5. That Respondent shall within 30 days of the expiration of time within which an appeal may be taken herein, submit a compliance report detailing the specific action taken to comply with the Commission's Order. The compliance report shall be directed to the attention of Kendra DePrey, Labor and Industry Review Commission, P. O. Box 8126, Madison, Wisconsin 53708.
Dated and mailed February 11, 1992
/s/ Pamela I. Anderson, Chairman
/s/ Richard T. Kreul, Commissioner
/s/ James R. Meier, Commissioner
NOTE: The Commission affirms the ALJ's decision in this matter but has modified and rewritten the decision by the ALJ in order to make it better conform with the evidence, and to set forth the back wages due Complainant after deducting the applicable offsets and crediting Respondent for amounts already paid to Complainant.
On appeal from the ALJ's decision, the Respondent takes issue with the fact that the ALJ's decision requires that Complainant be reinstated to the position of Head Inspector, argues that the back pay calculations made are in error and that Complainant has been fully paid, argues that no interest can or should be awarded in this case, and argues that Complainant is not entitled to any further attorney's fees.
With respect to the requirement that Complainant be reinstated to the position of Head Inspector, the Respondent argues, in essence, that its obligation to reinstate Complainant to this position terminated on July 13, 1984, when Complainant refused Respondent's offer of a transfer to the position of "stripper." In support of this argument, Respondent asserts on appeal that it did not need Complainant as a Head Inspector but did need strippers, that the position of stripper paid the same amount (7) and had the same amount of responsibility as the position of Head Inspector, and that there was no reason why Complainant could not have taken the lateral transfer. As further support for its position, Respondent cites various cases and argues that "the latitude allowed employers with respect to assigning duties and tasks is very wide," and that "employers are generally regarded (as having) the inherent right to direct their employes and determine the jobs to be performed." Further, the Respondent apparently considers the ALJ's requirement that Complainant be reinstated as a Head Inspector tantamount to granting Complainant "a job for life." Respondent argues that Complainant has no special privileges or rights granted to her by any order.
In general, the Commission has no disagreement with the Respondent's assertions regarding management's right to assign employes duties and to direct its workforce. Further, the Commission would also agree that Complainant has not been "granted a job for life" by virtue of the Commission's original order in this matter. However, the Commission rejects Respondent's argument that its obligation to reinstate Complainant to the position of Head Inspector terminated on July 13, 1984. The Commission's original order required that Complainant be reinstated as Head Inspector as a result of the Commission's determination that Complainant had been discriminatorily demoted from her position of Head Inspector and then discharged in retaliation for having filed a complaint over her demotion. Not only has the Respondent failed to ever comply with the Commission's order, the reason Respondent now urges on appeal for its failure to reinstate Complainant in the position of Head Inspector in July 1984 -- "Phillips Plating Corporation did not need Betty Olson as a head inspector" -- is entirely inconsistent with the reason Respondent provided at the hearing for not reinstating Complainant to that position. At the hearing, William Baratka testified that after the court litigation had ended (May 1984) and Respondent was faced with the directive to reinstate Complainant to the position of Head Inspector, Respondent declined to do so because Respondent felt "she was not qualified to take on that position at that time." (9/87 Hrg., pp. 76-77, 87, 89-90)
The Commission long ago rejected the argument by Respondent that Complainant was not qualified to work as a Head Inspector as a mere pretext for unlawful sex discrimination. See 10/9/81 Commission decision, p. 6. There the Commission stated that it "regards the Respondent's witnesses as seriously lacking in credibility," that the Commission "regards the Complainant as more credible than the witness for the Respondent," that "(t)he testimony of Respondents' witnesses is devoid of any reference to specific occurrences wherein the Complainant was shown to have done a poor job of carrying out her duties (of Head Inspector," and that "(t)he Commission was also struck by the internal inconsistencies in the testimony of Respondent's witnesses." Id. The Respondent's further inconsistency now in its assertions with regard to why Complainant has not been reinstated as a Head Inspector only further undermines its credibility in this matter. Accordingly, the Commission rejects the argument that Complainant was not needed as a Head Inspector in July 1984.
Additionally, while William Baratka's assertions regarding Complainant's alleged lack of qualification apparently includes a concern that Complainant had not been in the Head Inspector position for some time, this did not absolve Respondent of its obligation to reinstate Complainant to that position. The reason Complainant had not been in the Head Inspector position for some time was because of Respondent's unlawful discrimination against her. Consequently, any lack of ability Complainant may have sustained as a result of Respondent's unlawful discrimination is Respondent's obligation to restore.
The decision to offer Complainant the job of stripper apparently arose at the same time or soon after Respondent decided it would not reinstate Complainant as a Head Inspector. Immediately after stating that it was not felt Complainant was qualified to work as a Head Inspector, William Baratka testified that "And we then were advised (by counsel) that as long as we gave her a job of equal pay, and although there would be more responsibility in this particular position, we would offer that or transfer her to that position." (9/87 Hrg., p. 77) While it has been held in Anderson v. LIRC, 111 Wis. 2d 245, 330 N.W.2d 594 (1983), (8) that a valid offer of reinstatement ends the accrual of back pay, the Commission does not find that Respondent's offer of a stripper position satisfied Respondent's obligation to reinstate Complainant as a Head Inspector, or terminates the accrual of back pay.
First, the Commission's previous order specifically directed Respondent to reinstate Complainant into her position of Head Inspector and Respondent has presented no competent evidence to establish any valid reason for its failure to do so when it first chose not to do so in July 1984. (9) Secondly, Complainant has denied that Respondent told her Respondent wanted her to do the job of stripper, instead testifying that she was only told that there was a stripper position open and that she could have that job if she wanted it. (10/86 Hrg., pp. 46-47) In short, it was simply not made known to Complainant that this job offer was Respondent's attempt to satisfy its obligation under the commission's order that she be reinstated as Head Inspector. Third, although the court did state in Anderson that one of the elements of a valid offer of reinstatement was that such offer must be for the same or substantially equivalent position, the court noted that comparability in salary should not be the sole test of a reasonable offer of alternative employment: it is only one factor to be considered. Assuming for purposes of argument that the jobs of Head Inspector and Stripper were substantially equivalent (Baratka's testimony on 9/87 at p. 77 suggests that they may not have been), Complainant's testimony indicates that she was incapable of performing the job of stripper and thus there was a valid reason for her not to take this job. Complainant testified that when advised of the stripper job she told the employer she would try it but was not sure her back would hold up. (10/86 Hrg., p. 52) She further testified that she tried the stripper job for two hours and the next day she advised the employer that she did not want that job, her back was bothering her. Complainant testified that after working on the stripper job her back had bothered her all night. (10/86 Hrg., p. 100) There is no reason to disbelieve Complainant's testimony. Accordingly, the commission finds that the Respondent's offer of the stripper position to Complainant did not satisfy its obligation to reinstate Complainant as a Head Inspector, nor did it terminate the accrual of back pay.
Regarding the actual back pay calculations made by the ALJ, aside from claiming that the ALJ's calculations are in error because Complainant has been fully paid by virtue of Respondent's 3/14/86 check to Complainant for back pay up through 7/13/84 when Complainant refused the stripper job, Respondent argues that: (1) when the ALJ calculated the amounts owed Complainant for the period from May 3, 1979 through January 16, 1983, he should not have based his calculations on the actual earnings of the second shift Head Inspectors who worked for Respondent during that period of time. (The earnings of the individuals who worked as Head Inspectors during this time period included amounts they earned when reassigned to the first shift during second shift shutdowns); and (2) the ALJ's decision does not take into consideration the payments that had been made by Respondent. The Commission's decision modifies the ALJ's decision to credit the various payments Respondent has already made to Complainant, therefore this argument needs no further comment.
As for the remaining argument, the Respondent asserts that the Complainant would not have been reassigned to the first shift during second shift shutdowns from 5/3/79 through 1/16/83, therefore it was error to assess Complainant's back pay calculations on the basis of the earning experience of the second shift Head Inspector during this period. Respondent has asserted that it does not feel complainant was qualified such that she would have been reassigned to the first shift. Further, the Respondent takes the position that while the ALJ was correct in citing Anderson, supra, for the proposition that the actual earning experience of employes who worked at the company should be used to determine the back pay of the victim of discrimination, the ALJ misapplied the law because Anderson only holds that Complainant would be required to be paid the same as the person who occupied the second shift Head Inspector position, not that Complainant "becomes a 'super employee' and would be required to be transferred if there was a layoff." (10)
The Commission finds that the ALJ properly applied Anderson and did not err in including the first shift earnings received by the second shift Head Inspectors in calculating Complainant's back pay. In Anderson, the court accepted the practice of utilizing the actual earning experience of employes who worked at the employer in order to determine Complainant Anderson's back wages. 111 Wis. 2d at 251, n. 4 .
The evidence shows that when Respondent found it was necessary to shut down the second shift, Respondent's practice was to reassign some second shift employes to work on the first shift, depending on qualifications of the employes and the needs of the employer. The employes reassigned would be paid at the rate applicable for the job assigned to on the first shift. During second shift shutdowns from May 1979 to January 1983, the Head Inspectors were almost always reassigned to work on the first shift. The evidence shows that Complainant would have been reassigned to first shift during second shift shutdowns. First, prior to taking a maternity leave on November 3, 1978, Complainant had only been laid off work twice: once a few months after her initial hire on May 31, 1974 and once for a week or two when the entire plant was shut down for machine repairs. Second, prior to Complainant's termination in May 1979, she had performed five out of the seven possible floor jobs. Moreover, in asserting that Complainant would not have been qualified for reassignment to the first shift, Respondent relies on the same assertions it made as justification for her demotion and discharge. That is, that Complainant was an unsatisfactory employe and had a negative attitude. The Commission has previously rejected such assertions by Respondent in its October 1981 decision. There is no basis for accepting Respondent's assertions now when seeking to determine Complainant's back pay entitlement after her discharge for the period from May 3, 1979 to January 16, 1983. Based on this fact and considering Complainant's layoff history and her work experience in a variety of positions, it is clearly reasonable to include the first shift wages earned by Complainant's successors as the appropriate measure for calculating her back pay entitlement.
Next, Respondent argues that no interest can or should be included on Complainant's back pay award. First, Respondent argues that Complainant's award of back pay should not include interest because the original Commission decision did not specify a certain amount for back pay, because Complainant's attorney's proper procedure would have been to request the Commission to determine the amount and then have this filed with the court to be placed in the form of a judgment, which was not done, and because the law in Wisconsin provides that even a judgment only bears interest from the date of entry of judgment.
However, if Respondent's assertions were correct there would be no such thing as prejudgment interest on awards of back pay under the Wisconsin Fair Employment Act. Anderson v. LIRC, supra, specifically holds that back pay awards under the Act may be increased to include prejudgment interest. In Anderson, the court directed that the prejudgment interest commence from the date of the complainant's discriminatory discharge. Further, the Commission's (and Department's) standard practice in cases where unlawful discrimination has been found is to issue a generally worded back pay order which includes interest on the amount owed after giving consideration for all the applicable statutory setoffs. While Respondent has argued that interest does not run on an unsettled or unliquidated account because the paying party must know the amount due so as to be able to tender payment and stop the interest, in Anderson the court, citing Nelson v. Travelers Insurance Co., 102 Wis. 2d 159, 167-68, 306 N.W.2d 71 (1981), stated that the rule on awarding prejudgment interest in Wisconsin is that prejudgment interest may be recoverable where the amount due, though not truly liquidated,. is capable of determination by application of some fixed standard. Anderson, 111 Wis. 2d at 260.
Section 111.39 (4) (c), Stats., provides the fixed standard by which to determine the amount of back pay due:
"Section 111.39(4) (c) If, after hearing, the examiner finds that the respondent has engaged in discrimination or unfair honesty testing, the examiner shall make written findings and order such action by the respondent as will effectuate the purpose of this chapter, with or without back pay. . . . Back pay liability may not accrue from a date more than two years prior to the filing of a complaint with the department. Interim earnings or amounts earnable with reasonable diligence by the person discriminated against or subjected to unfair honesty testing shall operate to reduce back pay otherwise allowable. Amounts received by the person discriminated against or subjected to the unfair honesty testing as unemployment benefits or welfare payments shall not reduce the back pay otherwise allowable but shall be withheld from the person discriminated against or subjected to unfair honesty testing and immediately paid to the unemployment reserve fund or, in the case of a welfare payment, to the welfare agency making the payment."
Further, in Anderson, there was a dispute over whether an offer of reinstatement (which the court found did not constitute a valid offer) following the complainant's discharge was sufficient to terminate the accrual of back pay, and the supreme court still ordered prejudgment interest from the complainant's discharge until such time that there was a valid offer of reinstatement. Finally, it should be noted that the court in Anderson, again citing Nelson, also points out that the prejudgment interest obligation is not viewed as an additional penalty for the wrong, but is simply the value of the use of the money. That is, interest is added to the back pay award to provide a complainant compensation for the period of time in which he or she was rightfully entitled to the money but did not have use of the money.
Second, the Respondent argues that the inclusion of interest is discretionary and should not be awarded in this case because Respondent first forwarded its calculations of the back wages and fringes owed Complainant on July 6, 1984, after entering negotiations with Complainant's counsel to determine the figures, and that "(t)he delay has been caused by the Complainant's (counsel's) misconduct, dragging of feet, and failing to cooperate in attempting to resolve the (back pay) figures." (11)
It is true that the awarding of prejudgment interest is discretionary. Donnelly v. Yellow Freight System, 874 F.2d 402, 49 FEP Cases 1253 (7th Cir. 1989). Also, there is no question that this case has taken an extremely long time to get resolved. However, the Commission does not believe it has the ability to make a determination that Complainant's counsel was solely responsible for delaying resolution of the case.
First, what exists on the matter is not on the record but is basically contained in the parties' various letters in the case file and the arguments made on appeal to the Commission. Secondly, while there may have been some actual attempt by Respondent as far back as 1984 to calculate the amount due Complainant in order to resolve the case, it also appears that during all of this time Respondent's effort to resolve the case has been through seeking a settlement of the matter for something less than what was ordered by the Commission to make Complainant whole. This can be seen in the Respondent's failure to ever reinstate (or offer to reinstate) Complainant to the position of head inspector, and its insistence that she would have been laid off and not reassigned to the first shift every single time there was a shutdown of the second shift between May 1979 and January 1983. The letters in the file written by Complainant's counsel suggest that it is because Respondent was trying to get Complainant to settle the case for an amount that was significantly less than what was due Complainant under the Commission's order that the case has not been resolved. In Loerhrke v. Wanta Builders. Inc., 151 Wis. 2d 695, 445 N.W.2d 717 (Ct. App. 1989), the court held that prejudgment interest on the entire amount owed is not precluded if the sum tendered as settlement was on the condition that it be accepted as payment in full, and the amount owed is greater than the tender. Third, and finally, the Commission also notes that the parties have apparently even continued to "negotiate a settlement" after the matter was appealed to LIRC.
The bottom line may be that both counsel here are to some extent to blame for the delay. Under the circumstances, the Commission is not inclined to make a blanket denial of an award of interest as argued by Respondent. However, the Commission does find it appropriate to deny one year's interest because Complainant's counsel took over one year to submit his brief to the ALJ following the September 1987 hearing. In suspending the accrual of interest for one year, the Commission is cognizant of the fact that a minor factor in the delay in submitting Complainant's brief may have been caused by a need to obtain copies of certain hearing exhibits. The suspension of the accrual of interest shall be for calendar year 1988.
As a final matter, the Complainant seeks payment of attorney's fees and costs, to the extent such fees and costs have not already been paid by Respondent. Respondent argues that Complainant is not entitled to any further attorney's fees, stating that "(a)ny attorney's fees incurred in this matter is the result of ineptness, laziness, and failure to respond on behalf of the Complainant's attorney. The Commission will not deny Complainant's request for further attorney's fees for the same reasons that it refuses to deny an award of interest.
Complainant seeks recovery of attorney's fees, plus interest and costs totaling $72,651.70, as a prevailing complainant in her discrimination action against Respondent under the Wisconsin Fair Employment Act. The amount sought represents a "lodestar" amount of $34,281.25, an enhancement of the lodestar amount by a multiplier of 2, plus $1,492.40 as accrued interest for the period from March 14, 1986, to August 25, 1986, on a $22,819.75 federal court award of attorney's fees for work done in Complainant's behalf in connection with this case, and $2,596.80 for disbursements.
Respondent argues that the sum of $26,696.80 constitutes a reasonable attorney's fee award in this case. In arriving at this amount Respondent recommends that Complainant's lodestar figure be reduced to $24,100 and that her claim for enhancement be denied in its entirety, while allowing Complainant costs and disbursements totaling $2,596.80.
In calculating reasonable attorney's fees, the U.S. Supreme Court announced in Hensley v. Eckerhardt, 461 U.S. 424, 31 FEP Cases 1169 (1983), that the most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This figure is commonly referred to as the "lodestar" figure.
The fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates. Hensley. There is no dispute that Complainant is entitled to a fee award by virtue of her complete success on her claims of sex discrimination and retaliation. Based upon affidavit and a bill of particulars setting forth the services rendered, Complainant's counsel states that since February 28, 1984, 274.25 hours were reasonably expended in this matter and that $125 per hour constitutes a reasonable hourly rate for such services. Complainant had previously obtained a federal court judgment awarding her attorney's fees in the amount of $22,819.75 for work done in prosecuting this employment discrimination case from February 1980, until February 28, 1984.
Respondent asserts that the hours claimed in the lodestar fee computation should be reduced by 43.75 hours on account of vague or improper documentation for certain claimed activities, and on account of excessive and unwarranted expenditures of time on other claimed activities. Where the documentation of hours is inadequate, the award may be reduced accordingly. Hensley, 461 U.S. at 433. Also, hours not reasonably expended may be excluded. Id. Counsel should at least identify the general subject matter of time expenditures. Hensley, 461 U.S. at 437, n. 12. Overly general listed activities providing no indication as to the subject matter of the task have been disallowed as the court has no means of evaluating the reasonableness of such activities. Daniels v. Pipefitters' Assn., 53 FEP Cases 1677 (N.D. Ill. 1990). Where activities are grouped, time should be appropriately apportioned. Otherwise, the court is left with the choice of estimating a portion of the time for a particular activity, or excluding the entire entry. Claus by Claus v. Goshert, 657 F. Supp. 237 (N.D. Ind. 1987).
Activities Respondent identifies as inadequately documented by Complainant include those that simply say "correspond," and those containing multiple activities in a single entry. Respondent identifies 20 entries (totaling 8.75 hours) that simply say "correspond," and requests that the hours claimed for such activity be disallowed. Respondent notes over 40 instances in which there are multiple activities under a single entry. Respondent has also identified claims for activities that appear redundant, excessive and unwarranted. For example, Respondent notes that Complainant claims a total of 17.0 hours based on entries for 10/3/86, 10/6/86 and 10/7/86 in which the activities for these entries include, respectively, "review discovery materials," "review documents," and "review discovery materials." Respondent cites this as being excessive, given the redundancy of "document review." As a further example, Respondent notes that there are entries for six dates relating to preparation for the hearing on remedy that was held on October 9, 1986. The total hours claimed for these six dates is 41.25 hours, which Respondent submits is an excessive amount of preparation time for a 4-hour remedy hearing where Complainant was her only witness. Finally, citing Johnson v. Georgia Highway Express. Inc., 488 F. 2d 714, 7 FEP Cases 11 (5th Cir. 1974), wherein the court stated that non-legal work such as that involving compilation of facts and statistics may command a lesser rate, Respondent cites entries for 10/3/86, 10/10/86 and 11/19/86 as all including time expended for computation of remedy and thus commanding a lesser rate.
Respondent recommends that 23.75 hours be excluded for reasons of inadequate documentation and excessive expenditures of time with respect to the activities described above. Further, Respondent recommends that an additional 20 hours be excluded for time claimed for briefs; specifically, Complainant's reply brief on remedy proceedings (2/3/89) and a brief to LIRC (6/25/91) for which Complainant has billed for 29 and 23 hours, respectively. Respondent notes that both briefs are pretty much comprised of relatively simple straightforward factual arguments regarding remedies and interest without much reference to cases or precedent. Respondent. further points out that Complainant's brief to LIRC is basically the same as Complainant's initial brief on remedy filed with the ALJ.
Except for Respondent's suggested exclusion of .25 hours for inadequate documentation for a 6/8/87 (12) entry designated as "correspond," Respondent's recommended reduction in hours appears fair and reasonable. Accordingly, 43.5 hours have been excluded from the lodestar computation.
The U.S. Supreme Court has stated that a reasonable fee is to be calculated according to the prevailing market rates in the relevant community. Blum v. Stenson, 45 U.S. 886, 34 FEP Cases 417 (1984). An hourly rate determined based on affidavits that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation is normally deemed to be reasonable. Id., 34 FEP Cases at 421, n. 11. Affidavits submitted by Complainant established that his requested rate of $125 per hour is well within the current rates in the Madison community for similarly-qualified civil rights attorneys.
Complainant's counsel, having represented Complainant in this case since 1980 without payment of any legal fees except those paid in 1986 for the period through 2/28/84 as a result of a federal court award of attorney's fees, seeks utilization of the $125 hourly rate for all hours worked since 2/28/84 to account for the delay in payment of the attorney's fees. As noted by Complainant, courts have regularly recognized the delay factor, either by basing the fee award on current rates or by adjusting the fee based on historical rates to reflect its present value. Pennsylvania v. Delaware Valley Citizens' Council (Delaware Valley II), 483 U.S. 711, 45 FEP Cases 1750 (1987).
Respondent disputes use of the $125 hourly rate for all time expended since 1984. Respondent argues that because this case has an 11-year history (from 1980 when Complainant's counsel accepted the case) and Respondent has already paid a total of $28,583.35 in fees and interest in 1986, approximately half-way through this case, use of the current market hourly rate is inappropriate in calculating the lodestar figure. Citing New York State Assn. for Retarded Children. Inc. v. Carey, 711 F.2d 1136 (2nd Cir. 1983), Respondent advocates division of the litigation into two phases, and using one rate for the early phase and the current rate for the later phase. In Retarded Children, the court noted that in ordinary cases resolved in a year or two, it will make little difference whether historic or current rates applied since the price levels will vary only slightly from those prevailing when the litigation first got under way. The court stated, however, that current rates can overcompensate and provide plaintiffs a considerable windfall where the average billing rates grow much faster than inflation. Based upon Retarded Children, the fact that 55% of the total hours Complainant claims have been expended in the first four years (1984 thru 1987) whereas 45% of the total hours claimed have been expended in the second four years (1988 thru 1991), and the fact that utilizing the current rate of $125 per hour for all hours represents a 66% increase over the 1984 recognized current rate of $75 per hour, Respondent recommends that Complainant be awarded fees as follows: $100 per hour (except for the 60 hours of work performed by Complainant's counsel's associate which Respondent states should be compensated at a lower rate of $75 per hour (13) ) times 128.5 hours reasonably expended during 1984 thru 1987; (14) and $125 per hour for 102 reasonably expended hours during the years 1987 thru 12/11/91.
The Commission finds the Respondent's formula for calculating the fee award to account for the delay factor in this case to be reasonable. The following lodestar would result under Respondent's formula:
|1984-1987||60.00||$ 75||$ 4,500|
Complainant seeks an enhancement of the lodestar amount by a factor of 2 to compensate for the risk of non-payment for services in this matter, because of Respondent's vigorous resistance to Complainant's claim, because of the results achieved and because of the Respondent's delay in paying the attorney's fees previously awarded in this case.
Risk of Non-Payment
Complainant's counsel states that he accepted this case with full knowledge of Complainant's inability to pay for the legal services required and knowing full well that the only way he could get paid was by prevailing on the merits. Complainant's counsel asserts that without an adjustment of the lodestar amount for his risk of non-payment the Complainant would have faced substantial difficulties in obtaining counsel. On the matter of difficulty in obtaining counsel, the affidavits of two attorneys were included with Complainant's fee petition. The affidavit of one attorney, who does a significant amount of employment discrimination work (although he admits such work is becoming a decreasing percentage of his practice), states he is "less likely" to accept civil rights because they are primarily paid contingent upon victory. The affidavit of a second attorney, who states that "on occasion" he has handled civil rights cases but as a general proposition will refer such cases to attorneys in the community who concentrate in the civil rights area, asserts that based on his own personal experience and discussions with other attorneys, he believes that there are only a "handful" of competent attorneys willing to take cases on a wholly-contingent basis, and that the number of such attorneys is diminishing.
The U.S. Supreme Court considered whether a prevailing party should or may be awarded separate compensation for assuming the risk of not being paid in Delaware Valley II, supra. In Delaware Valley II, a concurring opinion by Justice O'Connor agreed with the plurality that "No enhancement for risk is appropriate unless the applicant can establish that without an adjustment for risk the prevailing party 'would have faced substantial difficulties in finding counsel in the local or other relevant market'." The Seventh Circuit Court of Appeals, among others, has stated that Justice O'Connor's concurring opinion represents the position of a majority of the court on risk multipliers. King v. Bd. of Regents of the University of Wisconsin System, 748 F. Supp. 686, 55 EPD par. 40,547 (1990), citing Skelton v. General Motors Corp. 860 F.2d 250 (7th Cir. 1988), cert. denied sub nom. General Motors v. Skelton, 110 S.Ct. 53 (1989).
Respondent, which apparently considers only the second attorney's affidavit to have addressed whether Complainant would have faced substantially difficulty in obtaining counsel, characterizes his affidavit as irrelevant. Respondent asserts that by this attorney's own admission he is not a civil rights attorney but a general practitioner who now focuses 90-95% of his practice on personal injury and worker's compensation cases, that he has handled plaintiffs' civil rights cases only "on occasion," and that he has admitted there are a "handful" of competent attorneys within the district who are willing to take cases on a contingent basis. Further, Respondent states that Complainant apparently had no difficulty obtaining counsel, as her counsel's affidavit states that he took the case upon receiving a call from Complainant, despite the fact that he knew he would have to take the case on a contingency basis. Based upon the above arguments, plus citing cases in the D.C. and Third Circuits which have held that the submission of affidavits from several local counsel fails to satisfy the substantial difficulties test justifying a contingency multiplier, Respondent argues that Complainant's claim for enhancement due to risk of non-payment must be denied. While perhaps some deference might be given to the D.C. and Third Circuits' view regarding submission of affidavits from attorneys, the ruling in those circuits are not controlling in the Seventh Circuit. Furthermore, other circuits, such as the Eighth, Ninth and Eleventh continue to accept attorneys' affidavits as sufficient evidence to establish that a plaintiff would have encountered substantial difficulties in obtaining counsel without a risk enhancement. See Morris v. American National Can Corp., 57 FEP Cases 199 (8th Cir. 1991); Fadhl v. City and County of San Francisco, 48 FEP Cases 55 (9th Cir. 1988), and Lattimor v. Oman Construction, 49 FEP Cases 472 (11th Cir. 1989).
Nonetheless, based on the attorneys' affidavits submitted in this matter, the Commission is not inclined to allow a multiplier for the risk of non-payment in this case. In King, supra, where the Seventh Circuit did allow a risk enhancement of the lodestar fee (at 25% rather than the 50% enhancement requested), the employer had submitted no evidence to refute the three attorneys' affidavits in support of the claim for risk enhancement. Further, in King, the court had also relied on its awareness of a plaintiff who proceeded on his own because he could not retain competent counsel on a contingency basis, even though he had a claim that was ultimately successful. Here, we have one attorney's affidavit which states that he is "less likely" to accept civil rights cases because they are primarily paid contingent upon victory, and the affidavit of another attorney who in essence admits that there are a "handful" of competent attorneys in the district who are willing to take cases on a wholly-contingent basis. The affidavits of the three remaining attorneys submitted in Complainant's behalf, all of which indicated that a substantial portion of their work involved employment discrimination law, did not address the matter of contingent fee cases in their practice. Also, the Commission is presently unable to recall where a complainant under the Wisconsin Fair Employment Act proceeded on his or her own because s/he could not retain competent counsel even though s/he had a claim that was ultimately successful.
Respondent's Vigorous Resistance
With respect to this basis for enhancement of the fee award, in Delaware II Justice O'Connor stated that "stubbornness of the defendants should already be reflected in the number of hours expended and the hourly rate and cannot be used again to increase the fee award." 45 FEP Cases at 1759.
Similarly, as to results achieved, in Blum v. Stenson, 45 U.S. 886, 34 FEP Cases 417 (1984), the Court stated that "because the 'results obtained' generally will be subsumed within other factors used -to calculate a reasonable fee, it normally should not provide an independent basis for increasing the fee award."
Also, Complainant asserts that an enhancement of the lodestar amount is warranted based on Respondent's delay in paying the attorney's fees which were previously awarded on May 31, 1984 by the federal district court. However, when Respondent paid Complainant the award of attorney's fees in 1986, it included interest on such award which compensated Complainant for that delay in payment. Complainant has acknowledged receiving $5,463.67 in interest. It should be noted, however, that while Complainant acknowledges that Respondent paid interest of $5,463.67, Complainant maintains that Respondent was short by $1,492.40 because when Respondent paid those fees on August 25, 1986, it only paid interest for the period of 5/31/84 to 3/14/86. Complainant asserts that Respondent has refused to pay the remaining interest and that it is still owing. Complainant's counsel's affidavit, paragraphs 5-15, support this claim. Respondent has not contested Complainant's claim for this additional interest. The $1,492.40 interest amount has therefore been added to the Commission's fee award made in this case. The Commission has added interest on the $1,492.40 amount at 12% simple interest from August 25, 1986. The Commission's calculations indicate that as of the end of last month $1,270.25 in additional interest is now owed on the $1,492.40 amount, for a total amount of $2,762.65 still owing.
Finally, Complainant seeks $2,596.80 for disbursements. Respondent has not contested this claim.
In Summation, the Commission has awarded attorney's fees and costs as follows:
|1984-1987||60.00||$ 75.00||$ 4,500.00|
|Interest due on 5/31/84
federal court award of
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(1)( Back ) While § Ind 88.18(4) of the Wis. Admin. Code states that interest shall be computed on a quarterly basis, this case does not facilitate the computation of interest in such manner. For example, the evidence regarding Complainant's interim earnings and unemployment compensation received were presented as yearly amounts. To properly calculate interest on a quarterly basis it was necessary to see these amounts broken down on a quarterly basis. Accordingly, the interest computations here have been figured on a yearly basis.
(2)( Back ) Complainant's figure of $246.24 does not appear accurate based upon Finding of Fact paragraph 11, section C.
(3)( Back ) Complainant's anniversary bonus figures submitted for 1984 and 1985 do not credit Respondent for bonus payments made to Complainant.
(4)( Back ) The vacation and personal day calculations submitted by Complainant for 1984, 1985 and 1986 have been modified based on Complainant's testimony at Vol. II, pp. 28-30 and pp. 17-18 of transcript.
(5)( Back ) The overtime loss calculations (1985 and 1986) submitted by Complainant appear to have been calculated on the basis of 105 hours rather than 210 hours.
(6)( Back ) The Commission calculates this amount based on Finding of Fact #5, combined with Complainant's testimony at Vol. II, p. 17.
(7)( Back ) As of July 1984, the job of stripper paid 10¢ less per hour than the job of Head Inspector.
(8)( Back ) In Anderson, the court discussed whether an offer of reinstatement terminated an employer's back pay obligation, what constituted a valid offer of reinstatement, and whether prejudgment interest should be included on a back pay award under the Act.
(9)( Back ) Regarding its order that Complainant be reinstated as a Head Inspector, the Commission does note, however, that apparently since sometime beginning in the early part of 1987 and continuing to the date of hearing in 1987, the Respondent did not operate the second shift and there has been no position of second shift Head Inspector. While the evidence does show that some second shift workers are reassigned to first shift work (see discussion Infra.), there is no indication that any second shift Head Inspector was ever assigned to displace a Head Inspector on the first shift. Also, it is not known if there has been a resumption of the second shift. Obviously, if the second shift is no longer in operation, Complainant cannot be reinstated as a Head Inspector on the second shift. There is also no requirement that Complainant displace another worker. Compliance with the Commission's order will require that she be placed in a substantially equivalent position if the second shift has continued not to operate.
(10)( Back ) Apparently in an attempt to bolster this claim Respondent has argued on appeal that it had contacted the Compliance Department of the Equal Rights Division to inquire if Respondent was required to terminate an employe on a different shift to make provisions for Ms. Olson, and was informed that they did not, that they were required to reinstate her to her previous position, but if that position was laid off, she could be laid off. There is no competent evidence in the record to support these assertions by Respondent. However, even if there were, these assertions are not relevant and do not prevent utilization of Complainant's successor's actual earning experience to determine Complainant's back pay wages.
(11)( Back ) The Respondent has also argued that the Equal Rights Division did not make a timely decision and that Respondent should "not be penalized for the neglect and incompetence of the ERD." Administrative delay was considered by the court in Chicago & N.W. R.R. v. LIRC, 91 Wis. 2d 462, 283 N.W.2d 603 (Ct. App. 1979). There, relying on Nat. Lab. Rel. Bd. v. Electric v. Cleaner Co. , 315 U.S. 685, 697-698 (1942), reh. den. 316 U.S. 708 (1942), and NLRB v. Rutter-Rex Mfg. Co., 396 U.S. 258, 264-265 (1969), reh. den. 397 U.S. 929 (1970), the court rejected the employer-appellant's complaint about the delay which had occurred in that case stating, "(I)f we were to accept appellant's theory, then administrative delay would deprive the employe of that which is rightfully his and financially absolve the employer of its wrongful conduct."
(12)( Back ) The file contains a letter dated 6/8/87 from Complainant's counsel to the ALJ regarding the status of the case. Respondent's former counsel was copied.
(13)( Back ) Complainant has submitted no affidavit regarding this associate's qualifications, experience and reputation in the area of employment discrimination law.
(14)( Back ) Respondent selected $100 per hour as a reasonable rate because it is the median figure between the acknowledged reasonable rate of $75 per hour in 1984 and the prevailing rate of $125 in 1991.